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Abhilekh

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India had the distinction of being the world's largest economy in the beginning of the Christian era, as it accounted for about 32.9% share of world GDP and about 17% [1] The goods produced in India had long been exported to far off destinations across the world.[2] Therefore, the concept of globalization is hardly new to India.

Contents

1 Trade
2 Payments
3 Investment
4 Remittances
5 References

Trade
Indian exports in 2006

International trade as a proportion of GDP reached 24% by 2006, up from 6% in 1985 and still relatively moderate.[3][4]

India currently accounts for 1.2% of World trade as of 2006 according to the World Trade Organization (WTO).[5] Until the liberalisation of 1991, India was largely and intentionally isolated from the world markets, to protect its fledgling economy and to achieve self-reliance. Foreign trade was subject to import tariffs, export taxes and quantitative restrictions, while foreign direct investment was restricted by upper-limit equity participation, restrictions on technology transfer, export obligations and government approvals; these approvals were needed for nearly 60% of new FDI in the industrial sector. The restrictions ensured that FDI averaged only around $200M annually between 1985 and 1991; a large percentage of the capital flows consisted of foreign aid, commercial borrowing and deposits of non-resident Indians.[6]

India's exports were stagnant for the first 15 years after independence, due to the predominance of tea, jute and cotton manufactures, demand for which was generally inelastic. Imports in the same period consisted predominantly of machinery, equipment and raw materials, due to nascent industrialisation. Since liberalisation, the value of India's international trade has become more broad-based and has risen to Indian Rupee symbol.svg 63,080,109 crores in 2003–04 from Indian Rupee symbol.svg 1,250 crores in 1950–51.[citation needed] India's major trading partners...